Medicaid might use managed care

State health officer says reform needed as program’s cost rises

Published: Thursday, November 15, 2012 at 3:30 a.m.

Last Modified: Thursday, November 15, 2012 at 12:31 a.m.

MONTGOMERY | Alabama’s Medi-caid program probably will move to some type of managed care system, much like private insurance functions with commercial management companies or community-based care.

“We have to manage this care differently going forward,” said Dr. Don Williamson, the state’s public health officer and the person Gov. Robert Bentley appointed to lead the state’s Medicaid reform effort.

“We have a fundamentally broken Medicaid system with disorganized, non-integrated care and a funding system that is not transparent,” Williamson said. “It’s not rational to add 200,000 to 400,000 new people (to Medicaid) if you are losing money on each visit.”

Typically, managed health care plans save money by contracting with doctors and hospitals to help control the fees they charge.

Bentley created the commission and asked it to recommend ways to modernize Alabama’s $5.3 billion Medicaid program, which consumes one-third of the discretionary general government budget, or about $600 million, this year.

Without change, the budget requirement will increase by about $100 million in the next fiscal year.

Bentley gave the commission until the February start of the legislative session to produce a report.

Alabama is one of three Southern states that does not use some form of managed care for its Medicaid program.

Williamson said it is inevitable that Medicaid will have to move to managed care in fiscal 2014, which starts Oct. 1, 2013.

He said Bentley’s decision on Tuesday not to expand Medicaid as it exists under federal guidelines doesn’t change the fact that Medicaid needs reforming from a provider-based payment system to a system that probably will cap expenditures and services.

One approach is to set up community-based managed care and another is to implement reform through managed care organizations.

The first approach was explained by Manett Health Solutions, which was hired by the Alabama Hospital Association. The second was explained by a UnitedHealthcare representative whose report was a collaboration with seven other managed care providers.

Manett managing director Tom Enders said that Medicaid might need a new source of revenue, probably a tobacco tax.

“We’re going to have to focus more on preventive care and early detection for Alabamians to be successful and make a living,” Reed said.

Williamson said he wants to present at least a framework of the direction for the commission to take by early December. If the commission decides to go to managed care, it could take two years to implement.

<p>MONTGOMERY | Alabama's Medi-caid program probably will move to some type of managed care system, much like private insurance functions with commercial management companies or community-based care.</p><p>“We have to manage this care differently going forward,” said Dr. Don Williamson, the state's public health officer and the person Gov. Robert Bentley appointed to lead the state's Medicaid reform effort.</p><p>“We have a fundamentally broken Medicaid system with disorganized, non-integrated care and a funding system that is not transparent,” Williamson said. “It's not rational to add 200,000 to 400,000 new people (to Medicaid) if you are losing money on each visit.”</p><p>The executive committee of the </p><p>Alabama Medicaid Advisory Commission met Wednesday to continue its task to redesign Medicaid to save taxpayers money while continuing to provide adequate service.</p><p>Typically, managed health care plans save money by contracting with doctors and hospitals to help control the fees they charge.</p><p>Bentley created the commission and asked it to recommend ways to modernize Alabama's $5.3 billion Medicaid program, which consumes one-third of the discretionary general government budget, or about $600 million, this year.</p><p>Without change, the budget requirement will increase by about $100 million in the next fiscal year.</p><p>Bentley gave the commission until the February start of the legislative session to produce a report.</p><p>Alabama is one of three Southern states that does not use some form of managed care for its Medicaid program.</p><p>Williamson said it is inevitable that Medicaid will have to move to managed care in fiscal 2014, which starts Oct. 1, 2013.</p><p>He said Bentley's decision on Tuesday not to expand Medicaid as it exists under federal guidelines doesn't change the fact that Medicaid needs reforming from a provider-based payment system to a system that probably will cap expenditures and services.</p><p>One approach is to set up community-based managed care and another is to implement reform through managed care organizations.</p><p>The first approach was explained by Manett Health Solutions, which was hired by the Alabama Hospital Association. The second was explained by a UnitedHealthcare representative whose report was a collaboration with seven other managed care providers.</p><p>Manett managing director Tom Enders said that Medicaid might need a new source of revenue, probably a tobacco tax.</p><p>Sen. Greg Reed, R-Jasper, vice chairman of the legislative Medicaid reform committee, noted that Alabama's citizens have worse underlying physical and medical problems than the national average. </p><p>“We're going to have to focus more on preventive care and early detection for Alabamians to be successful and make a living,” Reed said.</p><p>Williamson said he wants to present at least a framework of the direction for the commission to take by early December. If the commission decides to go to managed care, it could take two years to implement.</p>